It's afternoon tea time, let's chat casually. Has anyone noticed that every time there is big news in the US, such as expectations of Federal Reserve interest rate cuts, changes in board members or the chair, or even the earnings report of tech giant Nvidia, the price of digital currencies always seems to take a little dip, causing people to feel anxious? In fact, this is quite normal; when the big shots in Europe and America make a move, the global capital markets will ripple.
Why is this happening? Simply put, the Federal Reserve's policy determines the flow of funds. Lowering interest rates usually means borrowing money is cheaper, which leads to more money in the market, theoretically pushing up the prices of risk assets like Bitcoin and Ethereum. But it's not that simple; behind interest rate cuts may also be hidden signals of economic instability, causing everyone to become nervous, leading to increased market volatility in the short term, and the cryptocurrency prices naturally follow suit.
Moreover, with the complex array of US economic data, trade policies, and other news, investor sentiment can easily be affected, making cryptocurrency prices fluctuate like a roller coaster. But don’t think that these fluctuations are all bad; an active market sentiment is also a part of a healthy ecosystem. The important thing is that we should learn to view things rationally and not be frightened by short-term volatility.
In short, when you see the Americans making big moves, don’t rush to cut losses or dive in; take a moment to calmly analyze what the underlying signals mean. Use your mind and heart, as this cryptocurrency “marathon” is not a sprint that can be completed in one go, but a long-term endeavor that requires steady progress.
Wishing everyone smooth investments, earning more and losing less!
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